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Money demand revisited: An operational subjective approach
Author(s) -
Blattenberger Gail
Publication year - 1996
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/(sici)1099-1255(199603)11:2<153::aid-jae390>3.0.co;2-p
Subject(s) - context (archaeology) , interpretation (philosophy) , interest rate , econometrics , economics , computer science , macroeconomics , paleontology , biology , programming language
This paper proposes a method of data analysis founded on the philosophy and understanding of uncertain knowledge developed by Bruno de Finetti. Specifically, the paper investigates the informational content of interest rates for the prediction of M1. This empirical application replicates that of Cooley and Leroy (1981) and McAleer, Pagan, and Volker (1985), but the procedures and their interpretation follow the operational subjective approach. The issue of an autocorrelated error structure is recast in the operational subjective context. Methods are developed to assess the interest sensitivity of the demand for money in this context. © 1996 John Wiley & Sons, Ltd.